Mundoro Capital : Earning Document

MundoroConsolidated FinancialCapitalStatementsInc.

For the Year Ended December 31, 2023

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TABLE OF CONTENTS

INDEPENDENT AUDITORS REPORT	2
CONSOLIDATED BALANCE SHEETS	3
CONSOLIDATED STATEMENTS OF (INCOME) LOSS AND COMPREHENSIVE (INCOME)
LOSS	4
CONSOLIDATED STATEMENTS OF CASH FLOWS	5
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY	6
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	7
1.	NATURE OF OPERATIONS	7
2.	SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION	7
3.	THIRD PARTY FUNDED EXPLORATION PROGRAMS	10
4.	AMOUNTS RECEIVABLE	11
5.	DEPOSITS	11
6.	INVESTMENTS	11
7.	PROPERTY, PLANT AND EQUIPMENT	12
8.	MINERAL INTERESTS	12
9.	EXPLORATION AND PROJECT EVALUATION	15
10.	ACCOUNTS PAYABLE, ADVANCES AND ACCRUED LIABILITIES	15
11.	SHARE CAPITAL	16
12.	RELATED PARTY TRANSACTIONS AND BALANCES	17
13.	SEGMENTED INFORMATION	17
14.	CAPITAL MANAGEMENT	18
15.	FINANCIAL INSTRUMENTS	18
16.	INCOME TAXES	20
17.	SUBSEQUENT EVENTS	20

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Independent auditor's report

To the Shareholders of Mundoro Capital Inc.

Our opinion

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of Mundoro Capital Inc. and its subsidiaries (together, the Company) as at December 31, 2023 and 2022, and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (IFRS Accounting Standards).

What we have audited

The Company's consolidated financial statements comprise:

• the consolidated balance sheets as at December 31, 2023 and 2022;
• the consolidated statements of (income) loss and comprehensive (income) loss for the years then ended;
• the consolidated statements of cash flows for the years then ended;
• the consolidated statements of changes in equity for the years then ended; and
• the notes to the consolidated financial statements, which include significant accounting policies and other explanatory information.

Basis for opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the consolidated financial statements section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada. We have fulfilled our other ethical responsibilities in accordance with these requirements.

PricewaterhouseCoopers LLP

PwC Place, 250 Howe Street, Suite 1400, Vancouver, British Columbia, Canada V6C 3S7 T.: [phone], F.: [phone], Fax to mail: [e-mail]

PwC" refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2023. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matter

Valuation of investment

Refer to note 2 - Significant accounting policies and basis of preparation, note 6 - Investments and note 15 - Financial Instruments to the consolidated financial statements.

The Company holds a 2.9% equity interest in Galenit AD, a privately held company. The investment is classified as fair value through profit or loss. As at December 31, 2023, the fair value of the Company's investment in Galenit AD was estimated to be $167 thousand. Where the fair value of equity instruments cannot be derived from transactions in active markets, they are determined using appropriate valuation techniques for which sufficient data is available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. Management applied judgment in determining the fair value of the Company's investment, which was based on the estimated market value of mineral resources held by Galenit AD. The market value of mineral resources was estimated using comparable gold mining companies' public information on mineral resources and market valuation and then adjusting for certain factors such as size, location and liquidity of the investment.

We considered this a key audit matter due to (i) the significance of the investment balance; (ii) management's judgment in determining which companies are comparable to the investment in Galenit AD; and (iii) the auditor judgment and subjectivity involved in performing procedures to evaluate management's assessment of the fair value of the investment in Galenit AD.

How our audit addressed the key audit matter

Our approach to addressing the matter included the following procedures, among others:

• Developed an independent fair value estimate based on the adjusted market capitalization of a Canadian listed company which has a stake in three of the properties that Galenit AD holds an interest in. Market capitalization was adjusted for assets owned by the Canadian listed company that Galenit AD does not have an interest in.
• Compared the independent fair value estimate to management's estimate to evaluate the reasonableness of management's estimate.
• Verified the Company's extent of equity interest in the investment.
• Tested the disclosures made in the consolidated financial statements in relation to the investment.

Other information

Management is responsible for the other information. The other information comprises the Management's Discussion and Analysis.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of management and those charged with governance for the consolidated financial statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS Accounting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company's financial reporting process.

Auditor's responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partner on the audit resulting in this independent auditor's report is Lana Kirk.

/s/PricewaterhouseCoopers LLP

Chartered Professional Accountants

Vancouver, British Columbia

April 29, 2024

MUNDORO CAPITAL INC.

Twelve-Month Period Ended December 31, 2023 and 2022

( Expressed in Canadian Dollars)

CONSOLIDATED BALANCE SHEETS

As at				December 31, 2023		December 31, 2022
			Notes
	ASSETS
	Current assets
		Cash and cash equivalents		$	6,479,508	$	4,843,844
		Amounts receivable	4		394,179		168,581
		Amounts receivable from partners	3		292,773		510,877
		Deposits	5		-		464,261
		Prepaid expenses			387,432		110,816
					7,553,892		6,098,379
	Non-	current assets
		Deposits	5		212,058		-
		Investments	6		166,638		273,820
		Equipment and vehicles	7		410,016		151,988
		Mineral interests	8		54,321		92,986
					843,033		518,794
	TOTAL	ASSETS		$	8,396,925	$	6,617,173
	LIABILITIES
	Current liabilities
		Accounts payable and accrued liabilities	10,12	$	2,469,543	$	575,451
		Advances from partners	3		1,662,195		3,154,951
	TOTAL	LIABILITIES			4,131,738		3,730,402
	EQUITY
		Share capital	11		54,022,118		53,894,547
		Contributed surplus			9,094,652		9,094,652
		Stock options reserve			1,757,490		1,676,780
		Accumulated other comprehensive income			43,245		82,870
		Deficit			(60,652,318)		(61,862,078)
	TOTAL	EQUITY			4,265,187		2,886,771
	TOTAL	EQUITY AND LIABILITIES		$	8,396,925	$	6,617,173

The accompanying notes are an integral part of the consolidated financial statements.

Signed on behalf of the Board of Directors

/s/ Michael Calyniuk, Director

/s/ Teodora Dechev, Director

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MUNDORO CAPITAL INC.

Twelve-Month Period Ended December 31, 2023 and 2022

( Expressed in Canadian Dollars)

CONSOLIDATED STATEMENTS OF (INCOME) LOSS AND COMPREHENSIVE (INCOME) LOSS

								For the year ended
					Note	December 31, 2023		December 31, 2022
	Exploration and project evaluation	9		$	13,091,014			$	5,108,607
		Less: recoveries				(13,282,884)				(4,275,666)
								(191,870)				832,941
	Fees	earned and net option payments received	3			(3,015,408)				(886,887)
	Interest and other income				(74,201)				(50,097)
								(3,089,609)				(936,984)
	EXPENSES
		Corporate governance				425,570				374,703
		General and administrative				148,665				228,083
		Accounting and audit				444,922				322,520
		Corporate communication				345,485				322,967
								1,364,642				1,248,273
		(INCOME)/LOSS BEFORE OTHER EXPENSES				(1,916,837)				1,144,230
	OTHER (INCOME) EXPENSES
		Share-based payments				174,291				274,317
		Depreciation	7			82,932				36,762
		Decrease (Increase) in fair value of investments	6			107,182				222,758
		Write-down of mineral interests	8			11,512				17,032
		Foreign exchange (gain) loss				142,597				(101,888)
								518,514				448,981
	NET (INCOME) LOSS FOR THE YEAR BEFORE TAX			$	(1,398,323)			$	1,593,211
	INCOME TAX EXPENSE				188,563				-
	NET (INCOME) LOSS FOR THE YEAR AFTER TAX			$	(1,209,760)			$	1,593,211
	OTHER COMPREHENSIVE (INCOME) LOSS WHICH
		Foreign currency translation differences from foreign operations				39,625				(101,213)
		COMPREHENSIVE (INCOME) LOSS FOR THE YEAR			$	(1,170,135)			$	1,491,998
	BASIC AND DILUTED (INCOME) LOSS PER SHARE				$	(0.01)		$		0.02

The accompanying notes are an integral part of the consolidated financial statements.

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MUNDORO CAPITAL INC.

Twelve-Month Period Ended December 31, 2023 and 2022

( Expressed in Canadian Dollars)

CONSOLIDATED STATEMENTS OF CASH FLOWS

				For the year ended
			Note	December 31, 2023	December 31, 2022
Cash flows provided from (used in):
OPERATING ACTIVITIES
	Net income/(loss) for the year	$	1,209,760	(1,593,211)
	Adjustments for items not affecting cash:
		Depreciation		82,932	36,762
		Share-based payments		174,291	274,317
		Change in fair value of investments	6	107,182	222,758
		Gain on retirement of CEBA loan		-	(20,000)
		Write-down of mineral interests	8	11,512	17,032
		Write-off of receivables		-	21,717
		Unrealized foreign exchange (gain) loss		142,597	(10,261)
				1,728,274	(1,050,886)
		Option payments in excess of property carrying values	3	(1,107,202)	-
		Amounts receivable	3	(225,598)	(25,730)
		Amounts receivable from partners	3	218,104	(481,075)
		Prepaid expenses		(276,616)	(54,160)
		Deposits	5	271,000	(329,713)
		Accounts payable and accrued liabilities		1,894,094	(11,472)
		Advances from partners	3	(1,492,756)	3,154,951
Net cash provided by operating activities		1,009,300	1,203,915
	FINANCING ACTIVITIES
		Issuance of common shares for cash, stock option exercise		33,390	43,410
		Payment of government loans		-	(40,000)
Net cash flows from financing activities		33,990	3,410
	INVESTING ACTIVITIES
		Expenditures on mineral interests		(14,315)	(16,738)
		Option payments received	3	1,149,932	102,629
		Security deposit for mineral interests exploration		(18,797)	(121,093)
		Purchase of equipment		(346,455)	(38,468)
		Proceeds from disposition of assets		-	151
Net cash flows provided by (used in) investing activities		770,365	(73,519)
	Effects of exchange rate changes on cash and cash equivalents		(177,991)	122,561
Net increase in cash and cash equivalents		1,635,664	1,256,367
Cash and cash equivalents, beginning of year		4,843,844	3,587,477
Cash and cash equivalents, end of year	$	6,479,508	4,843,844

The accompanying notes are an integral part of the consolidated financial statements

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